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Building a company that runs successfully without you involves thinking of your business as an asset, rather than a job.
The core idea is to set your company up to be self-managing and attractive to an acquirer—even if you have no plans to sell. Making yourself attractive to an acquirer involves the very same things you need to create a self-managing company, because in essence, they are the same thing.
Acquirers look for companies that can run without their founder, which also happens to be the key ingredient in a self-managing business. Therefore, our approach involves optimizing your company’s performance across eight dimensions important to acquirers.
Your history of producing revenue and profit combined with the professionalism of your record keeping.
Your likelihood to grow your business in the future and at what rate.
How dependent your business is on any one employee, customer or supplier.
Whether your business is a cash suck or a cash spigot.
The proportion and quality of automatic, annuity-based revenue you collect each month.
How well differentiated your business is from competitors in your industry.
The likelihood that your customers will re-purchase and also refer you.
How your business would perform if you were unexpectedly unable to work for a period of three months.
Once you’ve got a business that can run smoothly without you pulling all of the strings, the next step in our process is to create a recurring revenue stream.
An annuity stream of revenue makes your company more predictable so you can plan for the future efficiently. It also boosts the lifetime value of your typical customer and most importantly, it jacks up the value of your company—in some cases doubling or even tripling the value of each dollar of revenue in the eyes of an acquirer.
This step can be a head-scratcher for a lot of owners, but there are nine unique subscription models to choose from, and just about any business can leverage at least one.
A subscription offering where the value of the subscription goes up, the more people that subscribe.
This model involves shipping a curated package of goodies to your subscribers each month.
A subscription offering a buffet of content to subscribers.
A subscription offering access to something of limited supply on a membership or subscription basis.
This model involves selling priority access to a group of your customers.
This model involves publishing your know-how behind a pay wall where subscribers get access to unique content.
This model involves taking a service you provide and establishing a contract with your customers to provide your service on an ongoing basis.
This model involves offering a subscription to a product that the customer needs to replenish on a regular basis.
This model involves selling an insurance premium to something your customer hopes they will never have to call upon.
The final step in our approach involves harvesting the value you’ve created. It’s one thing to have built value on paper, but it’s quite another to have the cash in the bank. Selling your business well is both science and art.
Our methodology will teach you how to build a compelling narrative and will give you a step-by-step guide for avoiding some of the land mines that trip up even the savviest owners.
Our approach shows you how to value your business, time your exit to maximize your take, find buyers and create a bidding war, which will allow you to punch above your weight in a negotiation to sell.
Think of selling your business as a long, tough journey into the backcountry. You will encounter plenty of obstacles, but if you pack right, you’ll be fine.
Structuring a successful sale of your business is about maximizing your leverage, and nothing allows you to negotiate with more confidence than multiple bidders vying for your company.
Selling your business can feel like a David-versus-Goliath battle. You may find yourself negotiating with a mercenary acquirer who makes a living from buying companies for less than they are worth.
